HIGHER SUBSCRIPT. FEE, NO VAT TO PUT HRT ON HEALTHY FEET - DIRECTOR

ZAGREB, Aug 14 (Hina) - A monthly subscription fee of 60 kuna (US$7,23) and the revocation of Value Added Tax on the fee would help Croatian Radio and Television (HRT) get back on healthy feet very soon, HRT director Mirko Galic told Hina on Monday. With the current 50 kuna monthly subscription fee, HRT lacks between five and ten million kuna, up to US$1.2 million, for normal business every month, he added. Galic says the situation on HRT is not as dramatic as indicated in a report, published by today's press, in which HRT's management estimates HRT's economic position and outlines a set of measures aimed at advancing this year's business. Galic reminds the report was compiled four months ago, when he assumed the director's post, and is based on financial data encountered at that time. Had rationalisation measures not been taken in the meantime, with plans to save up to 50 million kuna (US$6.02 million), this year HRT's loss would have amounted to 350 million kuna (US$42.17 million), he explained. The situation has improved somewhat thanks to an increase in the monthly subscription fee from 45 to 50 kuna, and higher marketing income earnings. This boosted HRT's total revenue in this year's first six months to 436 million kuna (US$52.53 million), against 392 million (US$47.23 million) in the first six months of 1999. HRT's expenditure has been significantly reduced as a result of cost rationalisation, including fewer manager's contracts, limited usage of official automobiles, a reduction in costs for part-time contributors, shorter duration of broadcasting, and the cancellation of shows with high losses. Expenditure in this year's first six months reached 557 million kuna (US$67.12 million), more than over the same period last year, but considerably less than the originally expected 624 million (US$75.18 million). Galic says all business costs at HRT have been reduced, except material and costs of communications leasing, which have increased. HRT's losses, however, continue to be very high, 120 million kuna (US$14.46 million) in this year's first six months. Galic pointed out they included 40 million (US$4.82 million) from before. HRT's director says the solution to the national television's financial issues lies in three spheres, the first being a reduction in costs for outside correspondents to 5.5-6 million kuna (US$723,000) a month, and a reduction in the number of employees from the current 3,500 to 2,500. The second sphere is the increase in the monthly subscription fee from the current 50 to 60 kuna. Galic says this would put HRT back on healthy feet very soon, but if the government were to assist. He says declaring by law the subscription fee a tax on a radio/television set, thus exempting it from VAT, would mean a great deal. He reminded that subscription fee on television is exempt from VAT in 90 percent of Europe's countries. HRT Council president Ivo Skrabalo agrees. He says VAT on the television subscription fee is a tax on a tax. Skrabalo added everybody was aware the 50 kuna monthly subscription fee would not be enough. The basic idea is to draw the line under HRT's business of the past and for the new management to start from breakeven point, he said. (hina) ha